This proposed research will estimate the economic costs of dementia in the U.S. population. These costs are actual dollar costs resulting from market transactions and implicit costs resulting from unpaid care. This project will estimate both cognitive decline leading to mild cognitive impairments and dementia is an increasingly common and important cause of disability and decreased quality of life for older Americans. The expected growth in the number of older adults with cognitive impairment and dementia will also place an increasing burden on families, the health care system, and social programs, such as Medicare. Given this wide-ranging impact, it is important to understand the full societal costs of cognitive decline and dementia in older Americans. This proposed study will: 1) Develop a statistical model of dementia status using the clinical assessment from the Aging, Demographics, and Memory Study (ADAMS) and predictors available in each wave of the Health and Retirement Study (HRS);2) Impute the probability of dementia for each HRS respondent;3) Estimate the effect of dementia status on the amount and type of health care utilization, conditional on other co-morbidities using self-reported data and HRS-linked Medicare data for respondents age 65 or older;4) Use information from the HRS-linked Medicare data, the Medical Expenditure Panel Survey, and geographical data on nursing home costs to evaluate the financial cost of different types of health care services, and calculate the direct financial cost of dementia due to health care utilization;5) Develop an economic model of informal health care provision, and use this framework to estimate the dollar value of time informal caregivers spend assisting demented individuals;and 6) Develop and implement survey items to address the issues of quality of care and multi-tasking among dementia caregivers;use these measures to provide alternative estimates of costs of informal care. This study will provide a better understanding of the full societal costs of cognitive decline and dementia in a nationally representative sample of older adults and, therefore, allow more informed health care planning and policy-making. In addition, a better understanding of the relative importance of medical, behavioral, and socioeconomic factors that are risks for cognitive decline and dementia will help clinicians and policy-makers target high-risk groups, implement interventions to prevent or slow cognitive decline, and better assess the cost-effectiveness of current and future interventions.